What is the scope of authority granted to the arbitrators in a Hydrodog franchise dispute?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.5 Powers of Arbitrators.
The authority of the Arbitrators will be limited to making a finding, judgment, decision and award relating to the interpretation of or adherence to the written provisions of this Agreement.
The Federal Rules of Evidence (the "Rules") will apply to all arbitration hearings and the introduction of all evidence, testimony, records, affidavits, documents and memoranda in any arbitration hearing must comply in all respects with the Rules and legal precedents interpreting the Rules.
Both parties will have the absolute right to cross-examine any person who testified against them or in favor of the other party.
The Arbitrators will have no authority to add to, delete or modify in any manner the terms and provisions of this Agreement.
All findings, judgments, decisions and awards of the Arbitrators will be limited to the dispute set forth in the written demand for arbitration, and the Arbitrators will have no authority to decide any other issues.
The Arbitrators will not have the right or authority to award punitive damages to either us or you, or any of our or your officers, directors, Owners and the Personal Guarantors.
Both parties, including their officers, directors, Owners and the Personal Guarantors, expressly waive their rights to plead or seek punitive damages.
All findings, judgments, decisions and
awards by the Arbitrators will be in writing, will be made within sixty (60) days after the arbitration hearing has been completed, and will be final and binding on you and us. The written decision of the Arbitrators will be deemed to be an order, judgment and decree and may be entered as such in any court of competent jurisdiction by either party. If, during the course of arbitration, either party fails to appear at a meeting or hearing duly scheduled in accordance with the Code of Procedure of the American Arbitration Association, the Arbitrators will have the absolute right to enter a default judgment and resulting order against the party failing to appear.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the arbitrators' authority is specifically limited to interpreting and ensuring adherence to the written provisions of the franchise agreement. The Federal Rules of Evidence will govern all arbitration hearings, dictating the admissibility of evidence. Both parties retain the right to cross-examine witnesses.
Importantly, the arbitrators cannot add to, delete from, or modify the terms of the agreement. Their decisions must be confined to the issues presented in the written demand for arbitration, precluding them from addressing unrelated matters. Furthermore, the arbitrators lack the power to award punitive damages to either Hydrodog or the franchisee, including their officers, directors, owners, and personal guarantors, with both parties explicitly waiving their rights to seek such damages.
All findings, judgments, decisions, and awards must be delivered in writing within 60 days after the completion of the arbitration hearing and are considered final and binding. The written decision can be entered as a judgment in any court with competent jurisdiction. A default judgment can be issued against a party that fails to attend a scheduled arbitration meeting or hearing.
This means a prospective Hydrodog franchisee should understand that arbitration is limited to the contract's existing terms, and they waive the right to seek punitive damages in such proceedings. The strict adherence to the Federal Rules of Evidence and the inability of arbitrators to modify the agreement provide a defined legal framework for dispute resolution.